SCHENECTADY  A State Street business owner and his son were accused Wednesday of running an food stamp fraud racket that bilked the program out of an estimated $500,000 over three years.

Vishnunarine Singh and his son, Elvin, were among 23 people arrested in a sweep that included 21 food stamp recipients, all connected to Cheese Bakery and Grocery at 1007 State St. Cheese Bakery and Grocery, is named for Vishnunarine Singh, nicknamed Cheese.

The elder Singh, of Ozone Park, Queens, faces felony counts of second-degree grand larceny, misuse of food stamps and first-degree falsifying business records. Elvin Singh, of Schenectady, faces three felony counts of first-degree falsifying business records and three misdemeanor counts of misuse of food stamps. Both men were to be held overnight and appear in City Court this morning.

Schenectady County District Attorney Robert Carney on Wednesday called the volume of fraudulent business being done by the small store staggering.

“We hope that we can make an example of them so that we can deter this conduct,” Carney said. “There are people who need food, need these benefits. When this kind of fraud occurs, it damages the entire program. It hurts the ability to help the truly needy.”

According to city arrest records, those accused of misusing their food stamp benefits, resulting in misdemeanor charges of misuse of food stamps and petty larceny, include:

• Greg Soucia, 28, of 927 State St.

• Latrice Neal, 25, of 1705 Albany St.

• Jeffrey Collins, 36, of 1302 Lower Broadway

• Joseph Gaito, 51, of 13 State St.

• Jose Berrios, 60, of 425 Hamilton St.

• George Bates, 64, of 13 State St.

• Fareedah Quarterman, 33, of DeGraff Street

• Chitranjan Persaud, 50, of 1103 McClyman St.

• Jerome McDowell, 25, of 1333 State St.

• Johanna Stevens, 22, of 925 Albany St.

• Laura Lazzari, 47, of 706 Altamont Ave.

• Rosalie Kahler, 42, of 15 Moyston St.

• Patricia Merritt, 56, of 288 Duane Ave.

• Nima Charboneau, 53, of 834 State St.

• Derrica McFarlane, 28, of 1005 State St.

• Wilbert Dunbar, 49, of 519 Hegeman St.

• Richard Guyton, 43, of 1253 State St.

• Lisa Hatcher, 35, of 826 Hamilton St.

• Anjanie Jaipersaud, 44, of 810 Lincoln Ave.

So many recipients were involved, prosecutors said, those arrests were limited to people with three or more fraudulent transactions of more than $100 each. The rest of the recipients implicated have been referred for program sanctions that could include the loss of their food stamp privileges, officials said. More arrests are possible.

Authorities said the scam involved food stamp recipients presenting their Electronic Benefit Transfer cards, with the owner or his son debiting it for an amount, usually $100 or more, then giving the recipient half the amount in cash and the store keeping the other half. Little or no goods would actually be purchased in the transactions, authorities said.

Despite the arrests, the business remained open late Wednesday afternoon. Employees declined comment, however, referring questions to the owner.

The arrests were the result of a six-month investigation by the Schenectady Police Department, Schenectady County District Attorney’s Office, Schenectady County Department of Social Services and United States Department of Agriculture.

The program allegedly defrauded was the USDA’s Supplemental Nutritional Assistance Program. City Police Chief Brian Kilcullen noted the purpose of the program is to help the needy purchase food.

“Instead,” Kilcullen said, “cash was obtained and potentially used for purposes entirely contrary to the purpose of the program. The cost of the abuse is staggering.”

Assistant Schenectady County District Attorney Katie McCutcheon estimated that in recent months the store rang up between $50,000 and $75,000 each month in food stamp transactions. By comparison, other stores of similar size in the area usually do between $5,000 and $8,000 per month in such sales.

Food stamp records, as well as information from community sources, helped alert investigators to the scam, McCutcheon said.

“It was a high, high volume of transactions, well exceeding anything we would expect for the area,” McCutcheon said.

Also assisting in the operation was the Schenectady County Probation Department and Child Protective Services and the state Division of Parole, Department of Taxation and Finance, Department of Financial Services and Office of Temporary Disability Assistance.

Authorities specifically cited work done by social services investigator Keith Feldman and city police Detectives Jeffrey Pardi and Paul Steele.

The small local corner markets survive off local shoppers. I hope this deters more merchants and food stamp recipients from this illegal activity.Horray that there is some enforcement against the merchants who ruin a good thing for the deserving people. Schenectady has a large population of undereducated, mental and physical disabled.No one else wants to live in the city.

Inexcusable on the part of the business. These locals businesses have a captive audience for their products, in that, they are within walking distance for many who do not have cars. And, they also benefit from serving ethnic dishes which cannot found elsewhere or offered on a very limited basis. There is more than enough money to be made if they simply play by the rules.